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Polaris
Posted: 14 May 2012 19:28:10(UTC)
#1

Joined: 24/01/2010(UTC)
Posts: 5
Hi,

When I first started working for my current employer they did not have a company pension scheme. However, my contract of employment states that 'the company will contribute to a personal pension of my choice'. They have continued to do this for several years now. The company does now offer a company pension scheme, however I (and many others) opted to continue with our existing arrangements.

Please can anybody tell me what will happen when auto enrollment comes into effect next year? It sounds like the company will be legally obliged to enroll everyone in the company scheme. But what happens about the apparent conflict with our contracts of employment? Obviously the company cannot contribute to both pensions, but can they force us to switch despite the clause in our contracts?

Currently about 10% of my salary (a combination of my and my employer's contributions) is paid into my personal pension, which I believe is above the minimum required ny the auto enrollment regulations.

Any thoughts would be much appreciated.
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Michelle McGagh (Citywire)
Posted: 23 May 2012 12:19:48(UTC)
#2

Joined: 02/02/2012(UTC)
Posts: 1

Was thanked: 1 time(s) in 1 post(s)
Hello,

I have been in touch with The Pensions Regulator and it seems they are happy for companies to continue with existing pension arrangements (whatever that may be) as long as they meet a 'qualifying criteria'.

The Pensions Regulator said:

'Employers will need to review their existing pension arrangements when getting ready for their new duties. If the existing arrangements meet the qualifying criteria set out in law then they can choose to leave existing members in that arrangement.

'However, if the pension scheme is not qualifying, then the employer could choose to amend the scheme to make it so. If they decide not to do that, then they will have to automatically enrol certain staff elsewhere. This is the case irrespective of existing contracts of employment.'

You need to ask your employer whether the scheme is qualifying under the new rules and if it is it shouldn't be a problem to continue as you are.

Hope this helps,
Michelle
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1 user thanked Michelle McGagh (Citywire) for this post.
Polaris on 23/05/2012(UTC)
Polaris
Posted: 23 May 2012 20:30:56(UTC)
#3

Joined: 24/01/2010(UTC)
Posts: 5
Hi Michelle,

Many thanks for your reply. Unfortunately I am pretty certain that my current pension scheme would not be a 'qualifying scheme' under the new rules. Basically, those of us that joined the company before they set up their own scheme are using our own personal pensions (in my case, set up in conjunction with a previous employer). So all of us are using different pension providers of our choice - the company is just making payments on an individual basis.

It just seems crazy that the new rules (which I understood were aimed primarily at those who are currently not making any/sufficient provisions for their retirement) should disrupt prudent savers who are already saving more than the required minimum and are happy to continue with their current arrangements. All it will mean is multiple pensions, additional administration and/or extra hassle to transfer. That apart from any employment law issues!!

Thanks again.
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